Copy of THE PHILIPPINE FINANCIAL SYSTEM

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Transcript of Copy of THE PHILIPPINE FINANCIAL SYSTEM

THE PHILIPPINE FINANCIAL SYSTEMFINANCIAL SYSTEM

transfer of money between investors and borrowers“Financial System” indicates a group of complex and closely linked institutions, agents, procedures, markets, transactions, claims and liabilities within an economy.COMPONENTS OF FINANCIAL SYSTEMBanks (banking sector)Non-Bank Financial Institutions (non-bank sector)Banking Sectorinteracts directly with customersindulges in a number of activities relating to Finance with a range of customersdeals with both internal and international customers interest is to help in business transactions and savings/ investment activities Non-banking sectorinteracts with banks and governmentsmainly concerned with the term loan needs of large enterprisesmainly concerned with the Finances of foreign companiesinterest is in the stabilization of the currencyBanking sector and Non-banking sector:WHAT'S THE DIFFERENCE?What do you mean by the Philippine Financial system?BANGKO SENTRAL NG PILIPINASUniversal Banks"Expanded Commercial Banks"- underwriting activities- equity investments in non- allied undertaking, and- up to 100% equity investments in financial intermediariesSpecialized Government BanksDevelopment Bank of the PhilippinesThrift BanksSavings and Mortgage Banks (SMBs)Rural Banks and CooperativesThese banks were designed to mobilize rural savings by accepting savings and time deposits.Commercial BanksThese are institutions that accept deposits and allow lending essentially on short term basis.Bank TypesLand Bank of the PhilippinesPhilippine Amanah BankPrivate Development Banks (PDBs)Stock Savings and Loan Association (SSLAs)Specialized Government BanksThese are unique government banks which are subject to the supervision and regulation by the BSP.Development Bank of the Philippinesdesigned to provide long-term finance for the rehabilitation of agriculture, industry and property damaged after World War II.Land Bank of the PhilippinesIt was the bank called upon to finance the acquisition by the government of landed estates for division and resale to small landholders, and the eventual purchase of the landholding by the tenant-lessee.

Philippine Amanah BankIt was especially designed to serve the banking needs of the Muslims areas in the South.

The Thrift Banks Act 1995 provided for the establishment, operation and supervision of thrift banks to include savings and mortgage banks, private development banks, and stock savings and loan associations.

Savings and Mortgage banksThese are institutions designed to accumulate the savings of depositor. These savings are their invested in various ways to earn income through loans, interest-bearing discount, real estate investments, personal finance and home building and home development activities.BANKING LAWSNew Central Bank Act (R.A No. 7653)which defines the power of the Bangko Sentral ng Pilipinas (BSP) in the administration of the monetary, banking and credit systemGeneral Banking Act (R.A No. 337)which regulates the operations of the banks and other financial institutions.Thrift Banks Act of 1995regulates the organization and operation of rural banks; Cooperative Code of the Philippines which governs the organizations and operations of non-stock savings and loans associations The Philippines Deposits Insurance Corporation (PIDC)The PIDC is the official insurance corporation of the banking system. It requires insured banks to pay an assessment rate so that their deposits are insured up to P100,00 pesos per depositor.The Securities and Exchange Commision (SEC)issues certificate of incorporation to financial corporationvotes on and approves amendmentsdischarge other functions in connection with the licensing of financing companies and investment housessupervises and regulates their specific areas of operation.

The Cooperative Development Authority (CDA)

The agency promulgates rules and regulations to govern the promotion, organization, registration and supervision of all types of cooperative banks.NON-BANK FINANCIAL INSTITUTIONSobtained from the publicobtained from other sourcesComponent Institution1. Investment Houses2. Financing Companies3. Investment Companiesa. mutual fundsb. close-ended funds4. Securities Dealers and Brokers5. Ventures Capital Corporations6. Pawnshop7. Lending Investors8. Government Non-Bank Financial Institutions9. Mutual Building10. Non-stock savings and loans associations (NSSLAs)BSP's major operating sectorSUPERVISION AND EXAMINATION SECTOR (SES)-conducts special examinations of banking institutions and quasi-banks including their subsidiaries and affiliatesBANKING SERVICE SECTOR (BSS)-tracks foreign exchange transaction, external debt and government securities of the BSPRESOURCE MANAGEMENT SECTOR (RMS)-supervise accounting operations, information technology systems, human resources, property management and other services of BSPThe Financial System is a network of various institutions. It is an important component of the economy because it provides funds to consumers, producers and traders.History of the Philippine Financial System?